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Are You Still Using a Rating System?

Posted on August 2, 2016.

It never ceases to amaze me how many companies are still using rating and ranking systems. Consultancy firm Aon Hewitt found that 90% of 880 surveyed tech employers in a recent survey used performance rating.

And tech firms are suppose to be on the cutting edge of everything, aren’t they? So I was pleased to see a recent article in the WSJ that GE has ended their employee rating system. This is quite a milestone for the company that Jack Welch built.

I applaud companies like GE who have finally realized that telling an employee they’re a “role model” or “unsatisfactory” is not the best way to recognize performance or provide valuable feedback. That said, if you don’t train managers on the correct way to deliver feedback, as the article indicates, you might end up with an employee that feels quality of the review has diminished.

If you’re serious about moving away from these antiquated systems here’s some tips on the best way to provide quality feedback:

1. Make it timely. I like GE’s idea of creating an app so you can message your employees in real time. But the key is “real time”, not at the end of the month when you’ve blocked off time, but when someone has actually either excelled at a task or failed miserably. You should wait no longer than 72 hours or the feedback starts to lose impact.

2. Always start with something positive. Yelling at someone who screwed up is actually pretty easy to do when it actually happens. Try to take a breath and look at the bigger picture. Unless you’re in the medical profession, it’s unlikely that your employee’s mistake resulted in death, so think about something positive you can say first. Starting with negative feedback makes people feel immediately defensive and can cause the recipient to shut down.

3. Be specific. Providing general comments like “ great job” or “your work was subpar” isn’t feedback. These kind of generalities might elicit an emotion, but it won’t improve bad performance or sustain strong performance over the long term, Be prepared to cite specific examples of what worked well and what would have worked better. And actually using phrases like, “ you might want to consider approaching the problem by….” Vs. “you made a huge mistake” is far more effective.

As I’ve often said, managing people is not for the faint of heart. I think of all the challenges we face, coaching and providing effective, valuable feedback has to be the hardest. It takes time to really evaluate a situation and an individual’s performance. But this is the job you signed up for.

Annually rankings, ratings and performance appraisals may make the job easier for you but as companies like GE are finally discovering, they are not only ineffective, but can be counter-productive.